G & G Closed Circuit Events, LLC v. Oscar Dorado Aguilar

Filing 77

ORDER VACATING January 10, 2025 Hearing; FINDINGS and RECOMMENDATIONS Regarding 76 Plaintiff's Application for Default Judgment by the Court signed by Magistrate Judge Barbara A. McAuliffe on 1/7/2025. Referred to Judge Thurston. Objections to F&R due within fourteen (14) days. (Deputy Clerk AML)

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UNITED STATES DISTRICT COURT

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FOR THE EASTERN DISTRICT OF CALIFORNIA

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G & G CLOSED CIRCUIT EVENTS,
LLC,
Plaintiff,

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v.

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OSCAR DORADO AGUILAR,

Case No. 1:20-cv-01745-JLT-BAM
ORDER VACATING JANUARY 10, 2025
HEARING
FINDINGS AND RECOMMENDATIONS
REGARDING PLAINTIFF’S
APPLICATION FOR DEAFULT
JUDGMENT BY THE COURT

Defendant.

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(Doc. 76)

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INTRODUCTION

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Pending before the Court is G & G Closed Circuit Events, LLC’s (“Plaintiff”) application

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for default judgment against Defendant Oscar Dorado Aguilar (“Defendant”) individually and

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d/b/a Rico’s Pizza. (Doc. 75.) The application was referred to the undersigned pursuant to 28

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U.S.C. § 636(b)(1)(B) and Local Rule 302. The Court deems the matter suitable for decision

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without oral argument pursuant to Local Rule 230(g), and VACATES the hearing scheduled for

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January 10, 2025. Having considered the moving papers, and the record, the Court will

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recommend that Plaintiff’s application for default judgment be granted in part, and that Plaintiff

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be awarded final judgment in the total amount of $5,000.00.

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BACKGROUND1

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Plaintiff, a distributor and licensor of sporting events, alleges that it was granted the

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exclusive rights to nationwide commercial distribution of Daniel Jacobs v. Julio Cesar Chavez,

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Jr. Championship Fight Program (“Program”), telecast on December 20, 2019. See Compl. ¶ 16.

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The Program included all under-card bouts and fight commentary. Id. Plaintiff alleges that the

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Program was unlawfully intercepted and exhibited by Defendant at his commercial establishment,

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Rico’s Pizza, located at 6994 Bridget Ct, Ste C, Winton, CA 95388. Id. ¶¶ 7, 21-22. The

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interception and exhibition allegedly were done willfully and for purposes of direct and/or

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indirect commercial advantage and/or private financial gain. Id. ¶ 23.

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On December 9, 2020, Plaintiff filed this action alleging violations of the Federal

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Communications Act, 47 U.S.C. § 605 and the Public Communications Act, 47 U.S.C. § 553, as

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well as violations of California law against conversion and California Business and Professions

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Code § 17200. Defendant answered the complaint on March 15, 2021. (Doc. 15.) On December

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5, 2022, Plaintiff and Defendant appeared at a scheduling conference in this matter, and pretrial

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and trial dates were set. (Docs. 37, 38.) Defendant filed a motion for summary judgment that

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was subsequently denied. (Docs 39, 43.)

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On August 26, 2024, the district court conducted the pretrial conference and Defendant

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failed to appear. Following the conference, the district court issued an order directing Defendant

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to show cause why his answer should not be stricken, and default judgment entered for failure to

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comply with pretrial requirements. (Doc. 72.) Defendant failed to file a response to the OSC.

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Accordingly, on October 4, 2024, the district court issued an order striking the answer filed by

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Defendant, directing the Clerk of the Court to enter default against Defendant, vacating the jury

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trial, and ordering Plaintiff to file a motion for default judgment. (Doc. 74.)

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The Clerk of the Court entered default against Defendant on October 4, 2024. (Doc. 75.)

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On December 6, 2024, Plaintiff filed the instant motion for default judgment. (Doc. 76.)

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Defendant did not file an opposition to the motion. Plaintiff’s motion requests that the Court

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The parties are familiar with the extensive procedural background of this action. The Court therefore
recounts the procedural background relevant only to the instant motion for default judgment.

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enter default judgment against Defendant for damages in the amount of $23,600.00 ($3,000 for

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statutory damages pursuant to 47 U.S.C. § 605(e)(3)(C)(i)(II); $20,000 for enhanced damages

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pursuant to 47 U.S.C. § 605(e)(3)(C)(ii); and $600 for conversion). (Doc. 76-1).

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LEGAL STANDARD

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Federal Rule of Civil Procedure 55(b)(2) governs applications to the court for default

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judgment. Fed. R. Civ. P. 55(b)(2). Upon default, the factual allegations of a complaint relating

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to liability are taken as true, while allegations regarding the amount of damages must be proven.

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Dundee Cement Co. v. Howard Pipe & Concrete Prods., Inc., 722 F.2d 1319, 1323 (7th Cir.

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1983) (citation omitted); TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987).

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In addition, “necessary facts not contained in the pleadings, and claims which are legally

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insufficient, are not established by default.” Cripps v. Life Ins. Co. of N. Am., 980 F.2d 1261,

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1267 (9th Cir. 1992) (citing Danning v. Lavine, 572 F.2d 1386, 1388 (9th Cir. 1978)); accord

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DIRECTV, Inc. v. Hoa Huynh, 503 F.3d 847, 854 (9th Cir. 2007) (stating that a defendant does

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not admit facts that are not well-pled or conclusions of law).

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Granting or denying default judgment is within the court’s sound discretion. Aldabe v.

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Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). Factors which may be considered by courts in

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exercising discretion as to the entry of a default judgment include: (1) the possibility of prejudice

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to the plaintiff; (2) the merits of plaintiff’s substantive claim; (3) the sufficiency of the complaint;

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(4) the sum of money at stake in the action; (5) the possibility of a dispute concerning material

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facts; (6) whether the default was due to excusable neglect; and (7) the strong policy underlying

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the Federal Rules of Civil Procedure favoring decisions on the merits. Eitel v. McCool, 782 F.2d

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1470, 1471-72 (9th Cir. 1986); PepsiCo, Inc. v. Cal. Sec. Cans, 238 F. Supp. 2d 1172, 1174 (C.D.

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Cal. 2002).

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DISCUSSION
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The Eitel Factors Favor Default Judgment
1. Possibility of Prejudice to Plaintiff

The first factor considers whether a plaintiff would suffer prejudice if default judgment is
not entered. See PepsiCo, Inc., 238 F. Supp. 2d at 1177. Generally, where default has been
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entered against a defendant, a plaintiff has no other means by which to recover damages. Id.;

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Moroccanoil, Inc. v. Allstate Beauty Prods., 847 F. Supp. 2d 1197, 1200-01 (C.D. Cal. 2012).

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Here, the Court finds Plaintiff would be prejudiced if default judgment were not granted. Default

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has been entered against Defendant and Plaintiff has no other means to recover against him. This

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factor weighs in favor of default judgment.

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2. Merits of Plaintiff’s Claims and Sufficiency of the Complaint
The second and third Eitel factors, taken together, “require that [the] plaintiff state a claim

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on which [the plaintiff] may recover.” PepsiCo, Inc., 238 F. Supp. 2d at 1175. As indicated, a

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“defendant is not held to admit facts that are not well-pleaded or to admit conclusions of law.”

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DIRECTV, 503 F.3d at 854 (9th Cir. 2007).

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Plaintiff’s motion for default judgment seeks recovery on its claim under 47 U.S.C. § 605

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and its claim under state law for conversion. (Doc. 76-1 at 7.) The Court examines each of these

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claims in turn.

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a. Violation of 47 U.S.C. § 605

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A violation of Section 605 requires that a defendant “(1) intercepted or aided the

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interception of, and (2) divulged or published, or aided the divulging or publishing of, a

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communication transmitted by the plaintiff.” Nat'l Subscription Television v. S & H TV, 644 F.2d

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820, 826 (9th Cir. 1981). Since the 1984 amendments to Section 605, communications protected

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by the statute include satellite television signals. Sosa v. DIRECTV, Inc., 437 F.3d 923, 926 (9th

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Cir. 2006). Where direct evidence of a defendant’s satellite signal piracy is unavailable,

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circumstantial evidence may suffice. Id.

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Here, Plaintiff has established exclusive ownership of the distribution rights to the

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Program. (Compl. ¶ 16; Doc. 76-2, Pl’s Aff. ¶¶ 3-4.) Plaintiff also has provided evidence that

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Defendant was never granted a sublicense to the Program. (Compl. ¶¶ 17- 21; Doc. 76-2, Pl.’s

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Aff. ¶ 3.) However, an investigator visiting Rico’s Pizza on December 20, 2019, witnessed the

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Program being broadcast on televisions within the establishment. (Doc.76-3 at 2.) Plaintiff

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acknowledges that it cannot be certain of the method of violation. (Doc. 76-1 at 9.) Given the

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circumstances, it can be inferred the broadcast relied on unlawful interception of the Program.
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See G & G Closed Cir. Events, LLC v. La Placita RM Rest. Inc., No. 2:22-cv-1089 DB, 2023 WL

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5035674, at *2 (E.D. Cal. Aug. 8, 2023), report and recommendation adopted, No. 2:22-CV-

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01089-DAD-DB, 2023 WL 5846676 (E.D. Cal. Sept. 11, 2023). Plaintiff has stated a claim

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under Section 605.

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b. Conversion

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A conversion claim requires that the plaintiff has “(1) ownership of or right to possess the

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property at time of conversion, (2) that the defendant disposed of the plaintiff's property rights or

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converted the property by wrongful act, and (3) damages.” Bank of New York v. Fremont

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General Corp., 523 F.3d 902, 914 (9th Cir. 2008). Here, Plaintiff has established exclusive

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ownership of the distribution rights to the Program. (Doc. 76-2, Pl’s Aff. ¶¶ 3-4.) See G & G

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Closed Cir. Events, LLC v. Saddeldin, No. 1:10-cv-00062-AWI-SKO, 2010 WL 3036455, at *4

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(E.D. Cal. Aug. 2, 2010) (concluding that exclusive distribution rights constitute a right to

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possession of property for purposes of conversion).

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Additionally, Plaintiff has demonstrated that Defendant exhibited the Program without a

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sublicense causing Plaintiff to suffer loss of the sublicensing fee. (Doc. 76-1 at 17.) Plaintiff's

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investigator observed a maximum of 25 patrons in Rico’s Pizza, with an approximate capacity of

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70 people. (Doc. 76-3 at 2.) The rate card for the Program states a sublicensing fee of $600 for a

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capacity of 1-100 people. (Doc. 76-2 at 35.) Plaintiff has established damages for conversion in

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the amount of $600. See La Placita RM Rest., 2023 WL 5035674, at *3. Thus, Plaintiff has

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established a claim for conversion.

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Based on the above, the Court finds that the second and third Eitel factors weigh in favor
of default judgment.

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3. Sum of Money at Stake

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Under the fourth factor cited in Eitel, “the court must consider the amount of money at

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stake in relation to the seriousness of Defendant’s conduct.” PepsiCo, Inc., 238 F. Supp. 2d at

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1176; see also Philip Morris USA, Inc. v. Castworld Prods., Inc., 219 F.R.D. 494, 500 (C.D. Cal.

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2003).

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Here, Plaintiff seeks $3,000 in statutory damages and $20,000 in enhanced damages under
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Section 605. (Doc. 76-1 at 9.) Plaintiff also seeks $600 in damages for conversion, an amount

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equal to the sublicensing fee. (Id.; Doc. 76-2 at 35.) The total amount of damages that Plaintiff

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seeks is not large, but courts are granted discretion in awarding damages. As discussed below,

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the Court declines to recommend judgment in the full amount requested. This factor therefore

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does not weigh against default judgment.

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4. Possibility of Disputed Material Facts

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The fifth Eitel factor examines the likelihood of a dispute between the parties regarding

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the material facts in the case. A defendant is “deemed to have admitted all well-pleaded factual

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allegations” in the complaint upon entry of default. DIRECTV, 503 F.3d at 851. Here the

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possibility of a dispute regarding a material fact is minimal because Defendant has shown no

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intent to participate further in this action and default has been entered. This factor therefore

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weighs in favor of default judgment.

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5. Whether the Default Was Due to Excusable Neglect
The sixth Eitel factor considers the possibility that Defendant’s default resulted from

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excusable neglect. PepsiCo, Inc., 238 F. Supp. 2d at 1177. Here, the Court finds the possibility

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of excusable neglect to be remote given Defendant’s decision not to participate further in this

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action. According to the record, Defendant failed to appear at the pretrial conference on August

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26, 2024, and failed to respond to the show cause order issued on August 27, 2024, despite the

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Court’s warning that the failure to respond would result in the Court striking Defendant’s answer

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and entering default. (Doc. 72.) This factor therefore weighs in favor of default judgment.

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6. Strong Policy Favoring Decisions on the Merits

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“Cases should be decided upon their merits whenever reasonably possible.” Eitel, 782

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F.2d at 1472. However, district courts have concluded with regularity that this policy, standing

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alone, is not dispositive, especially where a defendant fails to appear or defend itself in an action.

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PepsiCo, Inc., 238 F. Supp. 2d at 1177; see also Craigslist, Inc. v. Naturemarket, Inc., 694 F.

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Supp. 2d 1039, 1061 (N.D. Cal. Mar. 5, 2010). Although the Court is cognizant of the policy

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favoring decisions on the merits, such a decision is not possible here because Defendant has

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ceased participation in this action. Accordingly, the Court finds that this factor does not weigh
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against entry of default judgment.
Accordingly, the Court will recommend that Plaintiff’s application for default judgment
be granted.

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B. Calculation of Damages

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Plaintiff seeks $3,000 in statutory damages and $20,000 in enhanced damages under

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Section 605. (Doc. 76-1 at 9.) Plaintiff also seeks $600 in damages for conversion, an amount

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equal to the sublicensing fee. (Id.; Doc. 76-2 at 35.)

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1. Damages Under 47 U.S.C. § 605

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Section 605 allows a plaintiff to recover an award of statutory damages for each violation

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“in a sum of not less than $1,000 or more than $10,000, as the court considers just.” 47 U.S.C. §

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605(e)(3)(C)(i)(II). The statute further provides that enhanced damages may be awarded up to

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$100,000 where the court finds that “the violation was committed willfully and for purposes of

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direct or indirect commercial advantage or private financial gain.” 47 U.S.C. 605(e)(3)(C)(ii).

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Courts maintain their discretion in determining the appropriate amount of damages. Kingvision

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Pay–Per–View, Ltd. v. Backman, 102 F. Supp. 2d 1196, 1198 (N.D. Cal. 2000).

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a. Statutory Damages
Plaintiff’s application for default judgment seeks $ 3,000 in statutory damages. (Doc. 76-

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1 at 9, 11.) The Court can consider the following factors when determining statutory damages:

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promotional advertising by the defendant, the capacity of the establishment, the number of

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patrons present at the time of the broadcast, a cover charge, the number and size of televisions

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used for the broadcast, and whether a premium was charged on food and drink. Integrated Sports

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Media, Inc. v. Naranjo, No. 1:10-CV-00445, 2010 WL 3171182, at *4 (E.D. Cal. Aug. 11, 2010);

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see also La Placita RM Rest., 2023 WL 5035674, at *4. The Court may also consider whether the

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defendant is a repeat offender. Backman, 102 F. Supp. 2d at 1198-99. Courts weigh all factors,

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awarding statutory damages “according to the totality of the relevant circumstances.” G & G

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Closed Cir. Events, LLC v. Olvera, No. 2:18-CV-02467 MCE AC, 2020 WL 1503376, at *3

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(E.D. Cal. Mar. 30, 2020).

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Here, Plaintiff has submitted evidence that Defendant advertised showing the Program on
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the Facebook page for Rico’s Pizza. (Doc. 76-4, Riley Decl. ¶ 9 and Ex. 1.) Further, the

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investigator’s affidavit submitted by Plaintiff identifies an approximate capacity of 70 people at

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the establishment and that headcounts by the investigator at three separate times were 22, 25, and

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25. (Doc. 76-3 at 2.) The investigator also reported that the Program was shown on 4-5

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televisions, and the televisions were approximately 50 inches. (Id.) Plaintiff provided no

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evidence that Defendant imposed a cover charge, charged a premium on food and drinks, or that

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Defendant was a repeat offender.

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Under these circumstances, the Court will recommend an award of statutory damages in

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the amount of $2,000—more than twice the amount Defendant would have paid for a proper

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sublicense. The amount is proportional to the violation, while serving as deterrence of future

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violations as Section 605 intended. Additionally, the amount aligns with statutory damages

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awarded in similar circumstances in this district. See G&G Closed Cir. Events, LLC v. Hunter,

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No. 2:22-cv-1059-JAM-KJN, 2023 WL 6940173, at *5 (E.D. Cal. Oct. 20, 2023) (recommending

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“award of statutory damages in the amount of $2,600—twice the amount defendants would have

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paid for a license” where 30-35 patrons present, first-time offender defendant advertised, and

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collected a cover charge); La Placita RM Rest, 2023 WL 5035674, at *4 (recommending “award

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of statutory damages in the amount of $3,000—more than twice the amount defendants would

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have paid for a license” where sublicense amount was $1,300, 6 patrons were present, first-time

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offender defendant advertised, but collected no cover charge); G & G Closed Cir. Events, LLC v.

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Velasquez, No. 1:20-cv-01736-NONE-SAB, 2021 WL 3164096, at *11 (E.D. Cal. July 27, 2021)

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(recommending double the statutory minimum, or $2,000, where defendants advertised on

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Facebook, but there was little evidence regarding the extent of commercial advantage); G & G

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Closed Circuit Events, LLC v. Barajas-Quijada, Case No. 1:19-cv-1259 AWI JLT, 2020 WL

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64782, at *5 (E.D. Cal. Jan. 7, 2020) (recommending “award of $5,600—which is twice the cost

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of a proper sublicense” where 54 patrons were present, defendant advertised, and collected a

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cover charge).

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b. Enhanced Damages
Plaintiff seeks enhanced damages in the amount of $20,000. (Doc. 76-1 at 11.) Factors
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considered by courts in assessing enhanced damages include: (1) repeat violations; (2) the extent

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of the unlawful monetary gains; (3) actual damages to the plaintiff; (4) the defendant's advertising

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for the broadcast of the event; (5) charging cover to enter the establishment to view the event; or

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(6) charging a premium for food or drinks during the event. Velasquez, 2021 WL 3164096, at *11

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(citations omitted).

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The Court finds that enhanced damages are appropriate, but declines to recommend the

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requested amount of $20,000. There is no indication that Defendant is a repeat offender and there

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is no evidence of the extent of Defendant’s unlawful monetary gains. Although Plaintiff’s

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investigator counted between 22 and 25 patrons during the broadcast, there is no indication that

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this number was attributable to the Program. There also was no cover charge or evidence of any

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premium charged for food or drinks during the broadcast. However, Defendant did advertise the

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event on Facebook, which at least one court in this district has found significant. See Velasquez,

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2021 WL 3164096, at *12.

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Under the circumstances, the Court does not agree that the enhanced damages award in

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the amount requested is warranted. Given the relatively small amount of actual damages of $600

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for an establishment this size and the absence of evidence of other enhancing factors aside from

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advertising, the Court finds an award of $2,400 in enhanced damages, or about four times the

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value of the commercial license to air the Program, is appropriate. See Velasquez, 2021 WL

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3164096, at *12 (recommending enhanced damages award of $2,400, “or about four times (4x)

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the amount of actual conversion damages” given evidence of advertising on Facebook and goals

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of deterrence). Accordingly, the Court will recommend an enhanced damages award of $2,400.

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c. Conversion
Plaintiff seeks $600 in damages for conversion under California Civil Code § 3336. A

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plaintiff in action for conversion may recover the value of the property at the time of conversion.

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Kruger v. Bank of America, 145 Cal. App. 3d 204, 215 (1983); Cal. Civ. Code. § 3336. An

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establishment the size of Rico’s Pizza would have been required to pay $600 to obtain a

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commercial sublicense to broadcast the Program. (Doc. 76-2 at 35.)

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The Court recognizes that some courts in this District have declined to award both
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statutory damages and damages for conversion. See, e.g., La Placita RM Rest., 2023 WL

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5035674, at *5 (“Given that plaintiff sought and has been awarded statutory damages under

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Section 605, plaintiff has been sufficiently compensated, and an additional award for conversion

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is redundant.”); Barajas-Quijada, 2020 WL 635264 at *4 (“this Court has repeatedly declined to

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award damages for conversion in addition to statutory damages for the same wrong”); J & J

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Sports Prods. Inc. v. Cervantes, No. 1:16-cv-00485-DAD-JLT, 2018 WL 3702298, at *7 (E.D.

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Cal. Aug. 2, 2018) (“[B]ecause Plaintiff elected to receive statutory damages rather than actual

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damages under the Communications Act, the Court finds any damages for conversion are

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subsumed into the total award of $8,000.”) However, other courts in this District have reached

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the opposite conclusion and awarded statutory damages under § 605 and damages for the

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California state tort of conversion. See, e.g., Hunter, 2023 WL 6940173, at *6 (recommending an

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award of statutory damages, enhanced damages, and damages for conversion); Velasquez, 2021

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WL 3164096, at *12 (recommending an award of statutory damages, enhanced damages, and

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damages for conversion); Olvera, 2020 WL 1503376 (E.D. Cal. Mar. 30, 2020) (awarding

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$60,000 in statutory and enhanced damages and $12,500 for conversion); J & J Sports Prods.,

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Inc. v. Garcia, No. 1:15-cv-01034-DAD-BAM, 2016 WL 70165, at *6 (E.D. Cal. Jan. 6, 2016)

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(recommending award of compensatory damages, enhanced damages, and conversion damages);

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J & J Sports Prods., Inc. v. Ortega, No. 115CV00506JAMBAM, 2015 WL 8845563, at *6 (E.D.

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Cal. Dec. 16, 2015) (same). The Court will follow its prior recommendations and those courts

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granting conversion damages in addition to statutory damages. Accordingly, the Court will

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recommend an award of $600 for conversion.

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d. Attorneys’ Fees and Costs

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Title 47 U.S.C. § 605 mandates an award of costs and attorneys’ fees to an aggrieved

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party. Specifically, the section states that the court “shall direct the recovery of full costs,

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including awarding reasonable attorneys’ fees to an aggrieved party who prevails.” 47 U.S.C. §

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605(e)(3)(B)(iii). Plaintiff requests fourteen (14) days from the entry of judgment to submit its

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motion for costs and attorneys’ fees. The Court finds the request appropriate and recommends

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Plaintiff be allowed to submit such request within fourteen (14) days of entry of judgment.
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CONCLUSION AND RECOMMENDATIONS

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For the reasons stated, the Court RECOMMENDS as follows:

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1. Plaintiff’s application for default judgment be GRANTED in part.

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2. Judgment be entered in favor of Plaintiff and against Defendant in the total amount of

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$5,000.00, as follows:

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a. $2,000.00 in statutory damages pursuant to 47 U.S.C. § 605(e)(3)(C)(i)(II);

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b. $2,400.00 in enhanced statutory damages pursuant to 47 U.S.C. §

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605(e)(3(C)(ii);

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c. $600.00 in damages for conversion.
3. Plaintiff be ordered to submit a motion for costs and attorneys’ fees within fourteen

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(14) days from the date of entry of judgment.

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These Findings and Recommendations will be submitted to the United States District

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Judge assigned to the case, pursuant to the provisions of Title 28 U.S.C. § 636(b)(1). Within

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fourteen (14) days after being served with these Findings and Recommendations, the parties may

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file written objections with the court. The document should be captioned “Objections to

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Magistrate Judge’s Findings and Recommendations.” Objections, if any, shall not exceed

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fifteen (15) pages or include exhibits. Exhibits may be referenced by document and page

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number if already in the record before the Court. Any pages filed in excess of the 15-page

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limit may not be considered. The parties are advised that failure to file objections within the

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specified time may result in the waiver of the “right to challenge the magistrate’s factual

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findings” on appeal. Wilkerson v. Wheeler, 772 F.3d 834, 838–39 (9th Cir. 2014) (citing Baxter

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v. Sullivan, 923 F.2d 1391, 1394 (9th Cir. 1991)).

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IT IS SO ORDERED.
Dated:

/s/ Barbara A. McAuliffe

January 7, 2025

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UNITED STATES MAGISTRATE JUDGE

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